The 8th Wonder

Have you ever seen the Grand Canyon? 

What about the Pyramids of Egypt? 

Or the Great Wall of China?  

These are often referred to as Wonders of the World. 

Wealthy Baron Rothschild was once asked if he had seen the seven wonders of the world. He responded, “No, but I do know the advantages of the eighth wonder of the world—compound interest.” 

And Albert Einstein went so far to say that the greatest mathematical discovery of all time wasn’t E=MC²—it was compounding.

Who do you think would end up with more by age 65? A 21-year-old who started saving $1,000 a year for only the next eight years, or a 29-year-old who saved $1,000 a year for the next 37 years? 

Is it the 21-year-old who saved a total of $8,000? Or is it the 29-year-old who saved $37,000? 

Compounding can be your friend! Surprisingly, the person who saved only $8,000 accumulated more. Because he started earlier, he ended up with $64,000 more.

Understanding compounding is important. There are three variables to it: the length of time you save, the amount you save, and the percentage rate you earn while you save. 

We’ve already seen that the earlier you start the better.

As for the second variable, the amount you can save, to save $1,000 a year means you need to save an average of $2.74 a day. The key is to save consistently. 

As for the third variable, the rate of return you earn, if you invest $1,000 a year for 40 years and earn 6%, you’ll end up with $164,000. If you earn 8%, you’ll have $280,000!

You don’t have to be a world traveler to see the entire list of the Wonders of the World. Compounding is the one Wonder you can see from wherever you are!

In Christ,

Howard Dayton 

Founder

AUTHOR BIO 

Howard is the founder of Compass—finances God’s way and author of five books and six small group studies. He graduated from Cornell University and served two and a half years as a naval officer. But after a business partner challenged him to study the Bible to discover what God teaches about handling money, Howard’s life was profoundly changed. Since beginning in ministry, he has served as a full-time volunteer and has led more than 75 small groups. Howard married Beverly in 1971, and had two children and four grandchildren before she went Home to be with the Lord. In 2019, Howard remarried. He and his wife, Lynn, reside in Central Florida and Charleston, South Carolina.